Urals Crude at 3 Year Low of 33 Dollars (Video)

(KYIV) – Russia is facing growing economic pressure as its oil prices fall to their lowest level in more than three years, only days before a new round of United States sanctions is due to take effect. The latest figures, released by the state statistics agency, show that the country’s economic growth has slowed sharply at a time when its war spending remains high and access to foreign markets is tightening.

Russia’s main oil grade, Urals, is now selling at around 33 to 36 US Dollars per barrel, far below the level the Kremlin relies on to fund its budget. The price drop comes just before new White House measures targeting the country’s largest producers, Lukoil and Rosneft. The United States has said the sanctions aim to restrict revenue that supports Russia’s war in Ukraine.

Russia’s central bank reports that the country’s GDP growth for the third quarter was around 0.6 percent. This is far below early year expectations of between 2 and 2.5 percent. Analysts say the slowdown reflects the combined effect of Western restrictions and Ukrainian attacks on oil facilities, which have increased operational costs and disrupted exports.

The government also faces reduced income from its main revenue sources. Oil and gas earnings have fallen by more than 20 percent in 2025, a decline that began even before the new sanctions were announced. The drop has caused wider concerns about the sustainability of Russia’s war budget at a time when the conflict in Ukraine shows no sign of ending.

Major buyers such as India and China have reportedly reduced their purchases. Refineries in both countries are said to be concerned about the impact of future US restrictions on their own financial systems. This shift has left Russian companies dependent on smaller markets and forced them to offer deep price cuts. Reports indicate that some shipments of Russian crude are now waiting at sea because buyers have withdrawn from agreements.

 Decline in Urals Oil Price

Domestic pressure is also rising. With shrinking export income, the government plans to raise the national value added tax from 20 percent to 22 percent. At the same time, the threshold at which small businesses must begin paying this tax will fall from an annual turnover of 50 million roubles to 10 million roubles. The change means more companies will face higher rates at a difficult economic moment.

Some business owners in Russia say the new conditions will make it impossible for them to continue operating. Many warn that rising taxes combined with high fuel prices and weak consumer demand could force widespread closures. Their concerns reflect a deeper problem: shrinking activity in the private sector means fewer contributions to the national budget.

Russia’s oil companies are also confronting a storage shortage. With fewer buyers and shipments stuck offshore, some producers are nearing the point where they must halt pumping altogether. Industry specialists say that restarting production after such shutdowns can take years and heavy investment, something Russia may find hard to fund while its budget remains under strain.

Officials in Moscow have argued that these difficulties can be managed, but economic analysts note that the country is now dealing with the combined weight of long term sanctions, reduced foreign demand, and declining industrial output. The reliance on oil profits has left the economy exposed to further shocks, especially with new US and EU measures expected in the coming months.

The Russian dictator Vladimir Putin remains unwilling to scale back the conflict in Ukraine, despite growing financial pressures and the risk of further decline in economic activity. Analysts say the government appears committed to the war regardless of the cost, even as the long term outlook becomes increasingly uncertain.

In Kyiv, officials say the latest developments show that ongoing sanctions and Ukrainian military pressure are working. They argue that continued international support is essential to restrict Moscow’s ability to fund the war and to encourage further economic isolation of the Kremlin.

The situation is likely to develop further once the new sanctions come into force. Observers expect more disruption to Russia’s export operations and additional pressure on its already reduced revenue streams. Ukraine continues to call for stronger measures and says that its own drone operations will continue as part of its defence effort.